In Kenya’s evolving financial and legal landscape, temporary injunctions have emerged as a critical judicial tool, frequently invoked by borrowers to forestall the realization of securities in loan default cases. Courts are increasingly tasked with the act of balancing their equitable discretion to grant injunctive relief with the imperative to uphold creditors’ contractual and statutory rights.

Foundational framework and guiding principles

The landmark case of Giella v Cassman Brown & Co. Ltd EA 358, lays down a three-part test that an applicant must satisfy:

• The applicant must demonstrate a prima facie case with a probability of success;
• They must show they will suffer irreparable harm not compensable by damages; and
• If in doubt, the court will decide based on the balance of convenience.

These foundational principles are now applied through a more nuanced lens, especially within the context of banking litigation, where statutory powers of sale under the Land Act, 2012, and the Banking Act, Cap 488, intersect with equitable relief.

Recent judicial trends in Kenya

Recent jurisprudence highlights the Judiciary of Kenya’s approach to these complex cases:

• In Patrick Waweru Mwangi & Another v Housing Finance Co. of Kenya Ltd (2013) KEHC 1093 (KLR), the High Court emphasized that a lender must strictly comply with statutory notice requirements under the Land Act, 2012 before exercising the power of sale. An injunction was granted where notices were found to be defective, underscoring that procedural compliance is not optional, even in clear cases of default.
• In Margaret Njeri Muiruri v Bank of Baroda (Kenya) Limited (2014) KECA 319 (KLR), an injunction was granted because the bank’s failure to disclose key loan terms amounted to unconscionable conduct. This demonstrated the Judiciary’s willingness to protect borrowers from ambiguous lending practices.

A Case in Point: East African Cables PLC v. Equity Bank (Kenya) Limited & 2 others (Civil Case E277 OF 2023) KEHC 3507

A recent ruling involving TransCentury PLC and East African Cables PLC illustrates the courts’ evolving stance on repeated attempts to obtain injunctive relief. On 18th October, 2024, the High Court granted TransCentury PLC and East African Cables PLC a 120-day injunction to allow repayment of a debt owed to Equity Bank. After seeking an extension in February 2025, the court granted a further 90-day reprieve on 20th March, 2025, which lapsed on 18th June, 2025.

Despite non-repayment, TransCentury PLC and East African Cables PLC returned to court on 16th June, 2025, seeking another 120-day extension. The joint receivers and administrators planned to conduct a handover of the assets, records and affairs on 19th June, 2025. When the matter was heard on 20th June, 2025, the court declined to issue further interim orders, noting that a second review was impermissible.

The Bank argued the court was functus officio and lacked jurisdiction to entertain a fresh review. This was the third failed attempt by TransCentury PLC and East African Cables PLC to secure injunctive relief, following an earlier rejection by the Court of Appeal. It is notable that TransCentury PLC and East African Cables PLC have been in default of credit facilities advanced by Equity Bank Kenya Limited since October 2019, a period exceeding five years.

Balancing competing interests and Conclusion

Kenyan courts are increasingly mindful of:

• Borrowers’ rights to fair treatment and due process.
• Creditors’ rights to enforce security interests without undue delay.
• The public interest in maintaining confidence in the banking system.

Temporary injunctions remain a vital judicial safeguard in Kenya’s banking sector. However, recent jurisprudence reflects a maturing approach that balances equitable relief with commercial certainty. As courts continue to refine the threshold for injunctive relief, both lenders and borrowers must navigate a legal environment that prioritizes procedural integrity and good faith above all.

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